Exploring consolidation and integration opportunities
What are the main drivers of your company’s planned acquisition activity in your chosen market/country? (respondents could select two)
1 Source: S&P Capital IQ, 11 April 2012
Does your organization have an integration approach (i.e., a playbook or roadmap) to measure and realize synergies from transactions?
Health care mergers and acquisitions closed at a robust pace in 2010 and 2011 and are expected to continue with an upward spike in 2012.
Transactions range from hospital acquisitions of physician practices at one end of the spectrum, to the formation of ACOs at the other — and a variety of provider mergers, joint ventures, and collaboration agreements in between. The pressures leading to current consolidation trends, including capital and reimbursement challenges, show no signs of letting up.
Hospitals and health systems throughout the country are expected to continue to fortify their positions through consolidation strategies that ensure their viability — and add breadth and depth to their service offerings.
Considerations for your board and executive leaders
Have you analyzed your organization’s position in the marketplace, determining what services will need to be added to provide the continuum of care required most efficiently under changing reimbursement methods?
Do you track new alliances developing in your marketplace and potential acquisitions by nontraditional partners such as health insurers?
Have you identified other providers with whom you may want to affiliate and considered the impact on your: • Market share • Governance • Infrastructure • Quality outcomes • Economic performance • Strategic position
Have you sought opportunities to work with physician practices to start or expand new service lines that meet your long-term strategic plans?
Is your organization considering opportunities to raise debt and equity capital when/while it is available, including nontraditional sources of capital?
Have you assessed your organization’s real estate strategy and the options to monetize those assets?
Do you have a structure in place that facilitates executive and board review and approval of any proposed M&A transactions?
Do you recognize the importance of “speed to close” in today’s competitive M&A environment? Are you prepared and organized for business, legal, financial, tax, regulatory and compliance due diligence?
Do you maintain a fully formed and up-to-date virtual data room that can be clearly understood by potential debt or equity investors — proving the “business case” for your organization and its operations?
Have you identified financial, legal and other advisors to assist with the M&A process?
If you are pursuing acquisitions of physician and other ancillary service providers, do you have the in-house expertise needed to manage large medical practices efficiently?
If you are considering any M&A activity, have you evaluated the possibility of challenges by the FTC or other regulators and endeavored to structure the transaction in a way that is the least anticompetitive?
Does your organization have an integration approach (i.e., a playbook or roadmap) to measure and realize synergies from transactions? Are you prepared for post-closing integration of operational, financial and strategic activities?
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